Witness: Ex-Mass. Speaker DiMasi Pushed Contract

A key figure in the federal corruption trial of former Massachusetts House Speaker Salvatore DiMasi testified DiMasi personally lobbied top administration officials to sign off on two lucrative contracts that prosecutors say were central to a kickback scheme.

Joseph Lally, a former software salesman, testified Wednesday that DiMasi spoke with Gov. Deval Patrick and Patrick's former budget chief Leslie Kirwan about one of the deals - a $15 million software contract - and that DiMasi was interested in using his position as speaker for personal gain.

"I'm only going to be speaker for so long, so it's important that we make as much hay as possible," Lally said DiMasi told him during a 2006 golf outing.

Lally also testified that once the details of the alleged scheme began to come to light, an agitated DiMasi warned in a conference call that "if one of us breaks, we all fall."

Lally, who pleaded guilty and could receive a lighter prison sentence for his testimony, added an insider's view of what prosecutors say was a burgeoning plot to defraud the state.

Lally testified he'd known another key player in the alleged scheme, lobbyist Richard McDonough, for more than two decades and in 1996 hired him as a lobbyist for the software firm Cognos. McDonough was initially paid $5,000 a month - a fee that would grow to $25,000.

Lally said the two hit on a scheme to land Cognos the first of two lucrative contracts, a $4.5 million software deal with the state Department of Education.

DiMasi was key to the alleged scheme.

Lally said they first attempted to land the contract when DiMasi still was Ways and Means Chairman, but could not convince then-House Speaker Thomas Finneran to go along. Their luck changed, he said, when Finneran left and DiMasi became speaker.

In 2006, following the golf meeting, Lally said McDonough "high-fived him" and said "let's go, let's make some money."

To funnel money to DiMasi, Lally said they brought in Steven Topazio, a former law associate of DiMasi. Prosecutors said Cognos agreed to pay Topazio, who was not charged, a monthly $5,000 fee, $4,000 of which went to DiMasi.

They also brought a fourth individual into the alleged conspiracy, Richard Vitale, an accountant and close DiMasi friend. Lally said he agreed to pay McDonough and Vitale $100,000 each if the contract went through.

After former state Education Commissioner David Driscoll questioned the contract, Lally said DiMasi spoke with him and the contract was ultimately approved. Lally earned $891,000 in commission, paying McDonough and Vitale $100,000 each.

Lally said that he was told the money would help Vitale open a $250,000 line of credit for DiMasi through Vitale's real estate firm.

The second alleged scheme would require the state to approve a $15 million software contract - although the total was negotiated down to about $13 million.

Lally said he and McDonough again relied on DiMasi to get the contract into an emergency bond bill in 2007, after Patrick had taken office.

When the administration balked, Lally said he sent talking points through Vitale to DiMasi so DiMasi could make the case to Kirwan, then Patrick's secretary of administration and finance.

Kirwan wasn't convinced. Lally said DiMasi also spoke with Patrick during a weekly leadership meeting. He said McDonough said he would also try to press the case for the contract with Patrick's former top political strategist Doug Rubin.

Kirwan ultimately signed off on the contract although it was later canceled.

Before the administration agreed, Lally said McDonough told him he had to sign another consulting contract with Vitale for $500,000. Lally said that Vitale later told him that he and DiMasi were going to form a business partnership after DiMasi left office.

In court, Lally also testified to steps the alleged conspirators took to cover their tracks.

When a Cognos associate of Lally used DiMasi's name in an email, McDonough told Lally that was a bad idea. In their emails, prosecutors said DiMasi was instead referred to as "the boss," "the big guy" or "coach."

At one point when Cognos stopped making the $5,000 payments to Topazio, Lally fired off an email warning that the company should resume the payments because "we don't want to piss anyone off this late in the game."

Lally said the pressure intensified in 2008 after he got a call from a Boston Globe reporter.

During a subsequent meeting in Lally's basement, he said McDonough was worried he might be hiding a secret recording device.

According to Lally, McDonough said: "I want you to frisk me and then he said I want to frisk you."

This program aired on May 18, 2011. The audio for this program is not available.